Biotech company Sirtex accepts $1.87b foreign takeover offer

Biotech company Sirtex accepts $1.87b foreign takeover offer

Australian biotechnology and medical device group Sirtex Medical (ASX: SRX) has agreed to a $1.87 billion takeover offer from Chinese company CDH Genetech.

The listed Australian company says it has entered into a binding agreement with CDH to sell all its shares at $33.60 per share.

Varian Medical Systems was previously bidding for Sirtex's shares, but as Varian could not match or offer a superior proposal Sirtex terminated the scheme.

Sirtex is required to pay a break fee to Varian of approximately $16 million as a result of the Sirtex board supporting the CDH-CGP scheme. CDH and CGP have agreed to indemnify Sirtex against this break fee.

The CDH takeover offer is being made in partnership with China Grand Pharmaceutical and Healthcare Holdings Limited, with the total offer worth $1.87 billion dollars.

Sirtex's board has unanimously recommended the offer from CDH, saying it is in the best interests of Sirtex shareholders to accept it.

Interim chairman of Sirtex, Dr John Eady, says after reviewing the offer shareholders would be wise to vote yes for the nearly $2 billion offer.

"The Board has undertaken a comprehensive investigation of the merits and risks of the CDH-CGP Proposal, including seeking specialist advice in relation to specific regulatory, legal, funding and other risks," says Eady.

"Based on the materially higher offer price and our evaluation of the associated risks, the Board of Sirtex has formed the unanimous view that the CDH-CHP Proposal is a superior proposal and is in the best interests of shareholders."

Shares in Sirtex are up 3.2 per cent at $30.81 at the time of writing (11:35am AEST).

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